austerity - All posts tagged austerity

It\’s no secret George Soros thinks Germany fumbled the euro-zone debt crisis with its prescription of austerity for all. The billionaire hedge funder, who is promoting a new book, questions the very survival of the euro zone after the crisis turned what had been a voluntary association into an organization divided between creditors and debtors.

It\’s been a bad week for Greece and an even worse past 24 hours. And it stands to potentially get much worse, heaping pain on what\’s been a relatively calm few weeks in euro-land.

Greece\’s two biggest labor unions called for a major strike on Thursday to protest the shock closure of the state television company.

Reports say viewers saw TV screens go black as the government pulled the plug, calling it a \”haven of waste.\” Some journalists were reportedly holed up inside the headquarters of the Hellenic Broadcasting Corp.

European governments facing the cold reality of austerity are putting up plenty of assets for sale. But rarely does a forced seller find so many willing buyers as the French government did with 1,200 bottles from its cellar. It raised nearly three times the amount estimated.

The boys from New Jersey have just warmed the hearts (most of them anyway) in Madrid by selling tickets at a huge discount for a June 27 Bon Jovi show so that the austerity-ridden fans would not miss out on a new tour. Tickets went on sale for 18 to 39 euros, which compares to tickets fans would pay at a U.K. show — 14 euros to 99 euros for top seats.

Could Germany\’s success in the Champions League be a function of economic woes in traditionally strong soccer nations? As austerity measures get a grip on the broader economy less money is likely to find its way into the soccer clubs, but German clubs benefit from industry sponsorship, a broad fanbase and large public investments.

Some are hailing it as a victory of sorts for the U.K. government and Chancellor of the Exchequer George Osborne, but the International Monetary Fund\’s \”softer\” criticism of austerity measures still carried a bit of a sting.

Rogoff and Reinhart have finally put the record straight, officially. After maintaining a spirited defense of their 2010 research paper on debt and growth, which has been knocked for faulty calculations, missing out key countries and generally just getting austerity all wrong, the Harvard professors have published a formal correction.

In their latest op/ed, Harvard professors Carmen Reinhart and Kenneth Rogoff say it never really was about a choice between \”tight-fisted austerity and freewheeling spending. Governments have used a wide range of options over the ages. It is time to return to the toolkit.\”

Carmen Reinhart and Kenneth Rogoff — authors of a famous, and these days infamous, paper on the impact of sovereign debt burden on growth — threw the latest punch in the academic scuffle over their research. The Harvard University professors took to the New York Times op-ed section Friday to defend their findings, the latest in a string of back-and-forths since a University of Massachusetts, Amherst paper questioned their conclusions earlier this month.

Reinhart and Rogoff\’s research found that long-term growth is 1% lower for countries with debt loads greater than 90% of their gross domestic product. The finding, which came from within the bowels of the great recession in 2010, was often taken as support for government austerity measures. That is, until UMass researchers noted some spreadsheet errors that may have skewed growth rates. Among the noted errors were exclusion of Australia, Austria, Belgium, Canada, and Denmark from the analysis.

While conceding a spreadsheet coding error does exist that led them to miscalculate growth, the Harvard economists \”vehemently dispute\” the idea that they selectively left out data. The findings largely mirror previous defenses of their work. But the larger point they make, and one that perhaps has been obscured in the debate over their work, is that there is no magic data point to delineate government austerity policy.

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